NOIDA: The 3 development authorities in Gautam Budh Nagar cleared the long-awaited exit policy for realtors struggling to finish housing projects in Noida and Greater Noida and approved a number of measures to safeguard the interests of homebuyers.
The Project Settlement Policy has been sent to the state government for approval and can enter into force once it receives the green signal, which is just a matter of time. Noida Authority chairperson Rama Raman said once the state government’s approval comes, developers will need to open the escrow account”. “The account is going to be for each project of every builder and will be applicable to any or all the 3 authorities in Gautam Budh Nagar (Noida, Greater Noida, and YEIDA). It will likely be operated by the builder and the representative of buyers in that project jointly,” he explained.
One of the most important measure in the said policy is the use of escrow account to receive and spend funds for the particular housing project. The bank account will be monitored by the respective Authorities which will check if the developers are not using the funds for specific housing project in Noida or Greater Noida for some other project. And would emphasis on delayed projects and would ensure the finish of housing projects running behind schedule.
The exit policy has been chiefly created for four scenarios that may affect homebuyers and property companies within the twin cities.
Case 1: Where developer upon allotment of plot, starts selling the project without starting the construction. Authority has clarified that developer has no right to sell the units if he hasn’t started construction or created third-party rights. “The project in such case will be canceled and the developer would be asked to surrender the land to the Authority. However, the authority will forfeit 30% from the amount received from the developer. If third party rights have been created, the remaining 70% will be returned to buyers, explained Deepak Agarwal, CEO of the Greater Noida Industrial Development Authority.
Case 2: In case a builder has completed a project but is unable to procure a completion certificate. The developer will be offered a rescheduled payment policy for dues against the land cost. Authority will give them enough time-limit within this policy, which is going to be decided by the UP government within a month. “In cases where buyers are unable to get their properties registered, builders need to deposit 10% from the amount due (instead of the current 25%).
Case3: In case a builder has launched a housing project in Noida region on an element of the land allotted as well as the rest is lying unused. The realtor will need to forfeit 15% from the amount deposited with the Authority and will also be allotted land proportionate towards the remaining amount. This mean a builder can retain just that part of the land in which a project is being developed. The Authority will take back the rest of land, which is unused.
Case 4: In case a realtor needs a partner to finish a task. “Builders can take on board a co-developer to rescue sick housing project,” Agarwal explained. “If builders have leftover floor area ratio (FAR) within their projects, they are permitted to market it to co-developers, who can complete the project. Proceeds from the sale of flats will be deposited in an escrow account and used to pay off home buyers.”
Agarwal said the purpose of the insurance policy is not to bail out developers of housing projects in Noida & Greater Noida to but redress home buyers’ problems. “The concept would be to break the deadlock which has been created involving the buyers and builders to ensure that buyers may take possession of their long due houses or have their hard-earned money back.